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THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY

USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT

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Date:

GAIN Report Number:

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Report Highlights:

Japan is currently home to the third largest health food market in the world.

Sumio Thomas Aoki, Senior Marketing Specialist

Jharrod Meade-Frazier, Intern

Evan Mangino, ATO Deputy Director

Snack Foods

Retail Foods

Market Development Reports

Food Processing Ingredients

Beverages

Agricultural Trade Office Activities

Japan’s Health Food Market: Background, Trends and

Recommendations

Tokyo ATO

Japan

JA 4509

8/19/2014

Public Voluntary

General Information:

Table of Contents

1. Introduction

2. The Health Food Market

2.1 Health Food Market Definitions

2.1.1 Foods for Specified Health Uses (FOSHU)

2.1.2 Non-FOSHU

2.2 Market Trends

2.3 Health Food Imports

3. FOSHU

3.1 FOSHU Regulations

3.1.1 FOSHU Options

3.1.2 Requirements for FOSHU Approval

3.1.3 The FOSHU Approval Process

3.2 FOSHU Classifications

3.3 FOSHU Market and Trends

4. Non-FOSHU

4.1 Non-FOSHU Market and Trends

5. Social Factors Influencing the Market

5.1 Distribution

5.2 Aging Society

5.3 Metabolic Syndrome

5.4 Health Conscious Consumers

6. Ingredients

7. Successful Producers and Products

7.1 Mega Hit Products

7.2 Example of a Successful New-to-market Product

7.3 Manufacturers

8. Conclusions and Recommendations

8.1 Conclusions

8.2 Recommendations

Appendix

1. Introduction

Health foods and functional foods are a growing sector in the global food industry, and especially in

Japan. Japan is currently home to the third largest health food market in the world. Despite decreases

in the market in 2008 and 2009, during the economic contraction following the Lehman Shock, the

market has rebounded and growth is expected to continue.

Recently, many health concerns have prompted the Japanese government to implement new policies to

increase consumer awareness of health and functional aspects of food products. Factors such as the

aging population and metabolic syndrome (a life-style related syndrome that can lead to diabetes and

other health problems) are primary drivers of the health food market.

The health food market in Japan is an attractive one for ingredient suppliers and health food

manufacturers. U.S. firms already have a competitive advantage in supplying certain ingredients,

including dairy and corn-based products, to the Japanese health food market.

This report is provides an overview of Japan’s health food market and a primer on options of entry. To

succeed, companies must be aware of market trends, opportunities, and regulations.

2. The Health Food Market

Japan’s health food market saw steady growth up until 2008 (Figure 1). Before 2008, there was an

over-abundance of health food products, especially energy drinks, in the Japanese market. This market

saturation led many companies to remove their products from the market due to their inability to

compete. Products such as Suntory Holdings’ Dakara Vitamin Water and Otsuka Pharmaceutical’s

Oronamin C survived the saturated market and are still strong competitors today. In 2009, oversight for

health and functional food claims was transferred to the Consumer Affairs Agency (CAA). One of the

CAA’s functions is to explicitly regulate and monitor food labeling and the health food certification

standards known as “Food for Specified Health Uses” (FOSHU) and Food with Nutrient Function

Claims (FNFC).

Figure 1. Source: Fuji Keizai

Despite the market decline of 2008 and 2009, the health foods market showed steady growth in 2010

and 2011. When cross-referenced with the CAA’s data, Fuji Keizai’s estimates for 2010 and 2011

(Figure 1) are quite similar. Regular and steady market growth should continue in the years ahead as

the demand for health and functional foods is expected to grow considerably as the percentage of the

Japanese population over the age of 65, a key market demographic, continues to swell.

2.1 Health Food Market Definitions

The health food market has two primary categories, with two secondary categories. Given the data

available at the time, this report will focus on the primary categories which are known as “Foods for

Specified Health Uses” (FOSHU) and Non-FOSHU (labeled “So-Called ‘Health Foods” by the CAA)

through 2011.

Figure 2. Source: CAA, “Regulatory Systems of Health Claims in Japan”, 2011

2.1.1 Foods for Specified Health Uses (FOSHU)

FOSHU products must be reviewed and approved by the CAA to carry both the FOSHU logo and to

make specific claims regarding the product’s health benefits. FOSHU products may be food, drinks,

and health supplements. Another category regulated by CAA is “Foods with Specified Dietary Uses”

(FOSDU). FOSDU products carry a specific logo, and specifically target seniors, pregnant women,

infants, or people with certain diseases (See Chapter 3).

2.1.2 Non-FOSHU

Non-FOSHU products are food, drinks, and other health related products that have not been evaluated

by the CAA for FOSHU certification. Labeling regulations prohibit products in this category to make

specific health or nutrient claims. Within this category, however, there is a secondary category called

“Food with Nutrient Function Claims” (from here on referred to as FNFC). Products that fall under the

FNFC category may indicate their nutrient function on the label. This means that products may be

marketed by the function of specific ingredients, but not the product itself (See Chapter 4).

2.2 Market Trends

Both FOSHU and Non-FOSHU products in Japan are organized into 20 categories. Each category

represents an aspect of health that a product may improve. As shown in Figure 1, the Health Food

market peaked at approximately 1,850 billion JPY in 2005. It leveled out slightly before declining in

2008 to 1.793 billion JPY. It continued to drop in 2009, but as forecasted by CAA recovered in 2011.

Despite being well below 2005 sales, the overall market is still remarkably healthy.

Sales and Market Share by Category

Category 2005 2011

Sales Share Sales Share

Analeptic 195,000 10.5 202,200 11.3

Strengthen liver function 31,480 1.7 66,850 3.7

Skin care 135,250 7.3 189,200 10.6

Intestinal regulation 285,470 15.4 267,650 15

Weight control 163,970 8.9 119,300 6.7

Prevent lifestyle-related diseases 237,760 12.8 211,450 11.9

Immunostimulation 49,850 2.7 28,100 1.6

Stimulate blood circulation 37,100 2 32,000 1.8

Nutrition Balance 71,600 3.9 80,650 4.5

Strengthen bone structure 132,560 7.2 144,650 8.1

Arousal effect 17,710 1 19,050 1.1

Reduce anemia 13,080 0.7 19,450 1.1

Reduce throat irritation 46,100 2.5 37,650 2.1

Tooth decay reduction 67,150 3.6 54,500 3.1

Reduce halitosis 29,050 1.6 36,100 2

Reduce eyestrain 42,300 2.3 52,900 3

Multi-Balance 189,500 10.2 128,600 7.2

Hormone balance 15,650 0.8 8,450 0.5

Relax 9,170 0.5 4,300 0.2

Green charge 81,700 4.4 79,950 4.5

Totals 1,851,450 100 1,783,000 100

Source: Fuji Keizai

Table 2. Source: Fuji Keizai

Comparing sales and market share between all 20 categories in 2005 and 2011, certain categories stand

out (Table 2). The category that maintains the highest market share is “Intestinal regulation” at 15%.

The “Prevent lifestyle-related diseases” category is the second largest at 11.9%. The third largest

category is “Analeptic”, at 11.3%. Another notable category is “Strengthen liver function”, with market

share more than doubling between 2005 and 2011, despite having only 3.7%.

The increase in “Strengthen liver function” may possibly be attributed to the growing popularity of

products that alleviate the ill-effects of the overconsumption of alcohol, such as Ukon no Chikara.

Alcohol consumption is a traditional part of Japanese social and work functions. Since many have work

the following day, products that alleviate the symptoms of a hangover are always in demand.

The aging population and the demand for anti-aging skin care products may explain the increase in the

“Skin care” category’s market share. Japan is currently the largest skincare market in the world, and

women between the ages of 30-49 years old are the primary drivers of it. One report from Yahoo!’s PR

Newswire suggests that many women are starting to engage in preemptive anti-aging routines, helping

fuel the market.

Contemporary Japanese diets tend to be low in fiber and constipation is a common condition.

Fermented milk products such as Yakult Honsha’s Yakult 400 are very popular due to their positive

effects on intestinal flora and bowel movements. Probiotic yogurts and beverages are widely available

and are ideal healthy snacks for busy Japanese workers on the go.

Other notable categories are “Strengthen bone structure” which appeals to aging women with concerns

of osteoporosis; “Reduce halitosis” which has increased possibly due to the popularity of Xylitol

chewing gum; and “Nutrition balance” for consumers who don’t have the time to eat three square meals

a day. These growing sectors of the health food market in Japan may be appealing for U.S. producers to

explore further.

The “Multi-Balance” section shrunk from 10.2% to 7.2% of total market share. This may very well be

due to the addition of “Green Charge” and “Nutrition Balance” categories that were initially products

classified under “Multi-Balance”. A “Green Charge” is a nutritional drink mixing green leafy

vegetables such as kale and fruits, nuts and other vegetable ingredients.

“Weight control” saw the second largest decrease in market share. According to Euromonitor

International’s 2013 “Weight Management in Japan” report, many Japanese are turning back to healthy

eating habits and exercise to control their weight. The health food market is thriving, but products that

are meant to be supplementary to a healthy diet and exercise appear to be better sellers than products

promising weight loss.

2.4 Health Food Imports

According to the 2011 Japan External Trade Organization (JETRO) “Guidebook for Exports to Japan:

Health Foods and Dietary Supplements”, over 10% of the health food market is imported as a final

product or an ingredient. As of 2010, approximately 6.8% of health food and supplement imports

originated in the United States. The total numbers of imports saw regular growth from 17,484 tons in

2006, to 26,522 tons in 2010. Growth continued throughout the market downturn in 2008 (Figure 3).

Figure 3; Source: JETRO

In Figure 3, health food and supplement imports grew steadily in value since 2006, but declined since

2009. The decrease in value is likely due to the competitive market leading to reductions of imported

product and ingredient prices. Vitamin powders take up the most substantial share at 60% of total

health food imports. As Japan’s health food market expands, demand for imported ingredients may rise

with it.

3. FOSHU

Japan was the first country to attempt to regulate its health food market by introducing “Food for

Specified Health Uses” (FOSHU) standardization. For a product to become recognized as FOSHU

certified, it would have to be submitted for review to test its efficacy and safety. The process could take

anywhere between 6 months to 3 years or more, and requires substantial investment on behalf of the

producer. Certification, however, is voluntary. Unless a company is already heavily invested in the

product and established in Japan, there is very little incentive to go through the process.

In 2009, FOSHU regulatory responsibilities transferred from the MHLW to the CAA. In an attempt to

make certification more attractive to producers, the CAA added additional options for FOSHU

certification. The new options are meant to be more affordable and less time consuming than the

original regulations. As of 2011 there were over 980 FOSHU certified products on the market.

FOSHU Label

FOSDU Label

Recently, the CAA created another product certification called “Food for Specified Dietary Uses”

(FOSDU). In order to carry the FOSDU label, products must be reviewed and approved by the CAA.

These products are food products that are produced specifically for seniors, pregnant women, infants, or

people with certain diseases. See Appendix B for more information on FOSDU.

3.1 FOSHU Regulations

The following sections will cover the basic standards and options of FOSHU certification. With the

increase of FOSHU sales and the relaxing of restrictions since 2009, certification may become more

appealing to producers.

3.1.1 FOSHU Options

The CAA added 3 more options for alternative FOSHU labels in an effort to entice companies to

get their products FOSHU certified. The options are as follows:

FOSHU: The original regulation is explained in greater detail in 3.1.2 and 3.1.3. It

requires a full review and proof of health effects, safety, and overall quality.

Standardized FOSHU: Allows shortcuts for products whose safety has been approved

previously in order to make the process more efficient. It does not require a review for

efficacy, but evidence of safety must be provided.

Reduction of Disease Risk FOSHU: This is a shortcut for products whose ingredients

have already been established as clinically proven to reduce the risks of disease. It still

requires a review of scientific evidence of the final product.

Qualified FOSHU: Products that have not met all FOSHU requirements but include

ingredients that have demonstrated certain health effects.

All of the categories above, except for Standardized FOSHU, must go through a review process

conducted by the CAA and associated agencies. See Appendix A for more detail.

3.1.2 Requirements for FOSHU Approval

The basic requirements to meet FOSHU standards as listed by the CAA are:

Improvement of dietary habits and contribution to health maintenance and enhancement

can be expected by consuming the product.

Scientific evidence for the claimed health benefit is available.

Clinical and nutritional intake level of the product and/or its functional component is

established.

The product and/or its functional component are safe for human consumption.

Following items regarding functional component are defined: a) Physical, chemical and

biological characterization and its methods; b) Methods of qualitative and quantitative

analytical determination.

Nutrient constituent of same type of the food is not significantly changed.

The food is intended to be consumed on a daily basis and not on rare occasions.

The product or its functional component is not included in the medical drug list.

Source: CAA; “Regulator Systems of Health Claims in Japan”, 2011

3.1.3 The FOSHU Approval Process

FOSHU approval is a lengthy process that sometimes takes years to complete. Below is a

summary of the certification process:

Step 1: Applicant submits documents and samples to the CAA’s Food Labeling Division.

Step 2: The CAA distributes the documents and samples to both the Consumer

Commission, to review for efficacy of product; and Food Safety Commission, to review

for safety.

Step 3: If the sample meets effectiveness and safety requirements, the documents and

samples are sent to the Ministry of Health, Labour and Welfare to ensure the labeling

does not violate the Pharmaceutical Affairs Act.

Step 4: Finally, everything is returned to the CAA, and if the product is approved then the

company may label it as FOSHU.

For more on the FOSHU requirements and process, see Appendix A.

3.2 FOSHU Classifications

In addition to the 20 categories associated with all health foods, FOSHU products are further broken

down into 7 possible classifications. Note that 4 of the FOSHU classifications are part of the “Prevent

lifestyle-related diseases” category. `

FOSHU Classifications

FOSHU Classification Licensed FOSHU Products Health Food Category

(2011)

Intestinal Regulation 355 Intestinal Regulations

Reducing Cholesterol

Levels 139

Prevent lifestyle-related

diseases

Reducing Neutral Fats 90


diseases

Lowering Hypertension 119


diseases

Reducing Blood Glucose 148


diseases

Improving Mineral

Absorption 57 Strengthen bone structure

Tooth Decay Reduction 75 Tooth decay Reduction

Total 983

Source: JHNFA/Fuji Keizai/Promar Japan

Table 3; Source: JHNFA/Fuji Keizai

3.3 FOSHU Market and Trends

FOSHU Best Selling Products by Category (2011)

Category Company Products Type

Total

category

sales

Best

seller

market

share

Analeptic

Yamada

Yohoujou

Royal Jelly

King Supplement 91,550 17.1

Strengthen liver

function

Suntory

Holdings

Sesamin E

Plus

Soft

Capsule 37,450 44.9

Skin care Everlife Kojun Supplement 86,700 24.9

Intestinal regulation

Miki

Corporation Miki Prune Paste 26,800 38.8

Weight control DHC Protein Diet

Powdered

Drink 72,400 20.2

Prevent lifestyle-

related diseases

Suntory

Holdings

DHA&EPA

+ Sesamin E

Soft

Capsule 79,150 23

Immunostimulation

Yamada

Yohoujou Propolis 300 Soft capsule 25,900 20.1

Stimulate blood

circulation

Miki

Corporation Miki Echo 37

Tablet

Supplement 32,000 70.9

Nutrition Balance

Strengthen bone

structure

Suntory

Holdings

Glucosamine

&

Chondroitin

Tablet

Supplement 40,300 21

Arousal effect

Reduce anemia DHC Heme Iron Soft 4,300 24.4

Capsule

Reduce throat

irritation

Tooth decay

reduction

Reduce halitosis

Kobayashi

Pharmaceutical Breath Care Supplement 4,900 31.6

Reduce eyestrain

Wakasa

Seikatsu

Blueberry

Eye

Soft

Capsule 41,250 31.6

Multi-Balance Japan Amway Triple X

Tablet


Hormone balance DHC Soy Isoflavon Supplement 7,950 10.8

Relax DHC

St. John's

Wort Supplement 3,450 11.9

Green charge Sun Chlorella

Sun Chlorella

A

Tablet


Unit: Million Yen

Source: Fuji Keizai

Table 4; Source: Fuji Keizai

The “Analeptics” health food category is the highest selling FOSHU market. Analeptics support the

central nervous system, and heighten mental and physical function. This category’s popularity is most

likely due to the aging population’s health concerns in regard to their daily lives. Yamada Yohoujou’s

Royal Jelly King supplement has the largest market share of this category with 17.1% of the total.

Royal Jelly is a honey bee secretion that feeds the larva. It is a popular ingredient because it has a high

concentration of B vitamins and anti-aging properties.

“Skin care” is also a category that has a strong market, coming in at over 86,000 million JPY in 2011

for sales. As mentioned earlier, women as young as their 30s are already using preemptive anti-aging

product regimes. The most popular FOSHU skin care product is Everlife’s Kojun. The primary

ingredient is Hyaluronic Acid, which accelerates cell reproduction. Kojun enjoyed almost 25% of the

total “Skin care” market.

“Prevent life-style related diseases” is the third largest FOSHU category. The top selling product is

Suntory Holding’s DHA&EPA + Sesamin E. Its primary ingredients are fish oils (which contain Omega

3 fatty acids), sesamin (for fat reduction), and vitamin E (which prevents the spread of free-radicals).

Rising concerns about metabolic syndrome and the aging population are likely the primary factors

giving this category a boost.

Overall, the functional ingredients of these health foods are well documented. Change is most likely

due to marketing and promotions of the efficiency and effects of the product.

4. Non-FOSHU

The Non-FOSHU category of Japanese health foods was formerly referred to as “Health-Enhanced

Foods” and currently by the CAA as “So-Called ‘Health Foods’”. Despite the negative connotation of

the current title, it simply refers to the fact that these products have not been through the highly

regulated FOSHU certification process. It is important to note, however, that Non-FOSHU products

may be just as effective as their FOSHU counterparts.

The marketing and labeling of Non-FOSHU products is restricted from making express and specific

claims regarding the products effects on the body or to alleviate an existing health condition. The label

may, however, make general health claims. Products that meet FNFC standards are allowed to make

claims that point out the health benefits of the vitamins and minerals that the product contains. More

information on FNFC standards are found in Appendix B.

4.1 Non-FOSHU Market and Trends

Though Non-FOSHU products make up the majority of Japan’s health food market; FOSHU products

have increased slightly each year since 2009(Figure 4). This could be another indication of changing

consumer preferences, as they begin to trust FOSHU certified products more than their Non-FOSHU

counterparts. Despite this, the Non-FOSHU market is still a viable and affordable alternative to

FOSHU certification for health food producers.

Figure 4; Source: Fuji Keizai

Below, table 3 displays the top selling Non-FOSHU products by category in 2011 along with the

product’s market share of that particular category.

Non-FOSHU Best Selling Products by Category (2011)

Category Company Products Type

Total

category

sales

Best

seller

market

share

Analeptic Otsuka Oronamin C Energy 49,400 44.6

Pharmaceutical Drink

Strengthen liver

function House Foods

Ukon no

Chikara

Turmeric

Drink 17,500 59.5

Skin care

Suntory

Holdings

C.C.

Lemon

Lemon

Soda 29,650 28.9

Intestinal regulation Yakult Honsha Yakult 400

Fermented

Milk 69,200 28.7

Weight control

Oak Lawn

Marketing Hills Diet Jelly 8,000 17.1

Prevent lifestyle-

related diseases

Suntory

Holdings

Suntory

Black

Oolong Tea Diet Tea 32,500 24.6

Immunostimulation

Otsuka

Pharmaceutical

Five Mini

Plus

Vegetable

Drink 430 19.5

Stimulate blood

circulation

Nutrition Balance

Otsuka

Pharmaceutical

Calorie

Mate Health Bar 25,510 31.6

Strengthen bone

structure Meiji Dairies

Shikkari

Calcium Milk 19,860 19

Arousal effect Lotte Black Black

Chewing

Gum 6,750 35.4

Reduce anemia

Nippon Milk

Community

Senii &

Tetsu

Powder

Fermented

Milk 4,530 29.9

Reduce throat

irritation Kanro

Non-Sugar

Throat

Lozenge

Throat

Lozenge 8,700 23.1

Tooth decay

reduction Lotte Xylitol

Chewing

Gum 30,150 55.3

Reduce halitosis Cadbury Japan Clorets XP

Chewing

Gum 13,900 44.6

Reduce eyestrain Meiji Dairies

Bulgaria

Yogurt

Blueberry Yogurt 5,950 51.1

Multi-Balance

Suntory

Holdings

Dakara

Vitamin

Water

Vitamin

Water 37,300 58.2

Hormone balance Kagome Isofura Plus

Vegetable

Juice 260 52

Relax Glico

Mental

Balance

Chocolate

GABA Chocolate 500 58.8

Green charge Asahi Ryokou Aojiru 13,500 25

Ryokuken Aojiru Drink

Units: Million Yen

Source: Fuji Keizai


The “Intestinal regulation” category has consistently been the top selling category for Non-FOSHU

products. It is a thriving market filled with Yogurt and other dairy products. In 2011, Yakult Honsha’s

Yakult 400 was the best selling product in this category, occupying 28.7% market share.

“Analeptics” is still a lucrative market. Otsuka Pharmaceuticals’ Oronamin C was the top selling

energy drink. Oronamin C took up 44.6% of its category’s market share. Energy drinks are very

popular in Japan.

The “Multi-balance” category was the third largest, dominated by Suntory Holdings’ Dakara Vitamin

Water. Despite the decline since 2005, it is still a large market that may provide opportunities for US

companies.

The categories of “Relax”, “Hormone balance”, and “Immunostimulation” are very small compared to

the top three Non-FOSHU categories. Nonetheless, they are categories that are important to Japanese

consumers.

Milk products and chewing gum appear to be popular product types. In 2008, Japan’s chewing gum

sales were the largest in Asia. Especially popular are brands that have positive health effects. Lotte’s

Black Black chewing gum is packed full of caffeine and B-vitamins, and was the top selling Non-

FOSHU product in the “Arousal effect” category.

5. Social Factors Influencing the Market

5.1 Distribution

There are six distribution channels for Functional Foods: Retail stores, convenience stores, coops and

home delivery, TV and internet mail order, drug stores and pharmacies, and others.

Figure 5; Source: Fuji Keizai

In 2009, the largest distribution channels were retail stores, followed by TV/Internet mail order. Both

channels increased sales between 2009 and 2011, though retail was projected with a marginal growth.

TV/Internet mail order was forecasted to make a 7.3% sales increase by the end of 2011.

Coops and home delivery sales are forecasted to continue to decline. Drug stores and pharmacies are

expected to increase their sales slightly, due to the popularity of collagen and glucosamine products that

are primarily sold through these channels.

5.2 Aging Society

Estimates placed the population of Japan to be approximately 126 million people in 2012. The

estimated population of elderly citizens (65 years old and over) is 30.7 million. Today, seniors make up

over 24% of the entire nation’s population. The Japanese government expects the number to rise,

projecting that 40% of the total population in Japan will be in the elderly age bracket by 2055.

Japanese consumers are known for their awareness of health and ingredients in their food, and seniors

are no exception. In fact, they may be even more conscious than their younger counterparts. Rising

medical costs and the growing health concerns are causing seniors to be more aware of what they are

eating.

Many Japanese producers of Health foods are already targeting seniors with their products. From Meiji

Dairy’s Bulgaria Yogurt line to Everlife’s Kojun, various product types are appealing to this market.

Expect many health food producers to be marketing to seniors and retirees in the long term.

Figure 5; Source: Statistics Japan

5.3 Metabolic Syndrome

Metabolic syndrome has become more prevalent in Japan. Metabolic syndrome, which is commonly

defined in the United States as obesity, is thought to be the cause of various life-style related diseases

such as diabetes, hypertension, and cancer. Exercise and healthy eating habits are the two most

recommended ways to prevent metabolic syndrome.

A survey conducted by the MHLW in 2009 found that 14.4% of respondents were diagnosed with

metabolic syndrome. An additional 12.2% were diagnosed as being at risk of having metabolic

syndrome. (It should be noted that the obesity rate using thr World Health Organization standard of a

30 Body Mass Index is less than 3.5% in Japan, the lowest among all developed countries. However,

the official obesity rate in Japan, which uses a Body Mass Index of 25, is about 20-25%).

5.4 Health Conscious Consumers Surveys suggest that Japanese consumers are very health conscious in general and currently provide the

third largest market of Functional Foods in the world. A survey performed by the Health and Food

forum found that Japanese consumers between the ages of 20 and 70 years old are likely to have various

health concerns. When posed with the question of what they do to try to improve their health, 54%

responded that they take “health oriented products”. In addition, the CAA’s 2013 consumer surveys

found that almost 90% of consumers make purchasing choices based on function.

6. Ingredients The top selling ingredients are available in table 4.

Best Selling Ingredients

Function Ingredient Sales(2009) Sales(2011)

Intestinal regulation Lactic Acid 181,250 179,850

Strengthen bone structure Calcium 109,150 102,950

Nutrition balance Nutrition Balance 80,250 80,650

Skin care Vitamin C 77,350 79,700

Analeptic Royal Jelly 69,000 67,000

Analeptic Vitamin 58,500 57,550

Green Charge Aojiru 52,200 55,000

Sales: Million yen

Source: Fuji Keizai


Lactic Acid Lactic Acid is consistently the top selling ingredient for health foods and is the most popular ingredient

in the “Intestinal Regulation” category. Lactic Acid is touted to have anti-cancer qualities as well as

regulating the digestive system. In 2009, the sales of products containing lactic acids were 181 billion

JPY. It decreased, however, to 179 billion JPY in 2011. It is still, by far, the top selling ingredient

consistently since 2006.

Calcium Calcium is consistently the second best selling ingredient for health foods and is the most popular

ingredient in the “Strengthen bone structure” category. Calcium’s function of strengthening bones is

especially important to the middle-aged female population who are more susceptible to Osteoporosis.

In 2009, the sales of the products containing Calcium were 109 billion JPY. However, it fell to

approximately 102 billion JPY by 2011.

Vitamin C Vitamin C is in high demand in the “Skin care” category; due to its ability to help prevent wrinkles and

aging. In 2009, products containing Vitamin C generated sales of 77 billion JPY. Sales are expected to

increase to 79 billion JPY by 2011.

Royal Jelly Royal Jelly is a Honey Bee secretion that feeds their larva and nourishes the Queens during the initial

weeks of their lives. It is said to have various benefits such as anti-aging and respiratory benefits.

Products containing Royal Jelly generated 58 billion JPY in 2009, but dropped to 57 billion JPY by

2011.

Aojiru Aojiru refers to the Japanese kale drink, but is sometimes substituted with young barley. Aojiru

contains over 40 vitamins and minerals, making it a nutritious beverage for people to enjoy while on the

go. Aojiru products are quite popular in Japan. As an ingredient, it grew in sales from 52 billion JPY to

55 billion in 2011.

7. Successful Producers and Products This chapter examines the most successful producers in the market. See Appenix C for a list of the top

10 companies in 2009.

7.1. Mega Hit Products The most successful products in the Health foods market are listed below in table 5.


7.2 Example of a Successful Newcomer Product

Figure 5; Fuji Keizai

Before entering the health food market, House Foods specialized in curry products, which Turmeric is

the primary ingredient. Turmeric is touted for various health properties as an analeptic, treatment for

chronic diseases, and has long been used in Asian traditional medicine. This specialization led them to

create Ukon no Chikara. House Foods claims that since turmeric helps to accelerate one’s metabolism,

alcohol is therefore metabolized quicker, leading to a hangover free morning. Ukon no Chikara is

available as a beverage and in tablet form.

The target market for this product is primarily working males between the ages of 30-40 years old.

House Foods also released a cassis flavored Ukon no Chikara that targets the female demographic with

some success.

House Foods’ marketing campaign was key to the product’s success. Television commercials were

aired in intelligently selected time slots, samples were distributed, and advertisements were placed in

high traffic train stations and trains. Their catchy slogan was easily remembered, translating to: “Let’s

drink Ukon before we go drinking!” Consumers claim that not only does it work (thanks to the

turmeric), but it tastes good as well.

7.3 Manufacturers

Suntory Holding Limited As of 2009, Suntory Holding Limited had the largest market share with sales of just over 166 billion

JPY, increasing from 113 billion JPY in 2006. Since 2006, the company has been the leader in the

Functional Food market. Their top product in 2009 was the top seller in the Skin Care category, C.C.

Lemon.

C.C. Lemon

Kuro Oolongcha

Meiji Dairies Corporation Meiji Dairies has been Suntory Holding Limited’s biggest competitor in the Functional Food market. In

2009, Meiji Dairies’ total sales were at 107 billion JPY; A slight decrease from their 2006 performance

of 112 billion JPY. Meiji Dairies dominates the yogurt market with their products Probio Yogurt LG21

and Bulgaria Yogurt LB81.

Probio Yogurt LG21

Bulgaria LB81

Otsuka Pharmaceutical

Otsuka Pharmaceutical generated about 94 billion JPY in sales in 2009, an increase of about 2 billion

JPY since 2006. Their top product has consistently been Oronamin C, which is an energy drink that

contains the primary ingredient Vitamin C along with amino acids and B vitamins. The product is

named after their original ointment product Oronine H Ointment. In 2000, they released a related

product called Oronamin C Royal Polis which contains Royal Jelly as a supplementary ingredient.

Oronamin C

Other Companies Other manufacturers are Yakult Honsha with 2009 figures of 92 billion JPY, Miki Corporation at 60

billion JPY, and LOTTE at 52 billion JPY. A list of the top 10 manufacturers in 2009 is available in

Appendix C.

8. Conclusions and Recommendations

8.1 Conclusions

The Overall Health Food Market Despite the down turn in 2008, the health food market in Japan is still vibrant and alive. The

Non-FOSHU sector still dominates the total market, and may be a good place for exporters to

test the waters. It is a cheaper alternative to the prestigious FOSHU certified sector. The

FOSHU certified sector on the other hand has been gaining ground in the market. Though still a

minority of the market, CAA regulations have provided producers more incentives to become

certified and consumers seem to trust the FOSHU brand.

Finished Product Opportunities Promising finished products that may be ripe for export to the Japanese Health food

market are:

Health drinks; especially tea, energy drinks, and vitamin drinks.

Health foods; especially yogurt, chewing gum, and health bars.

Health supplements; especially skin-care products and multi-vitamins.

Ingredient Opportunities Some of the best product opportunities in Japan for American producers are functional

ingredients. Products that appear especially attractive for exporters include:

Vitamins and Minerals(powders, derivatives; calcium and vitamin C)

Dairy ingredients (lactic acid, lactose, and whey)

Aloe

Devils claw and corn (which glucosamine and calcium are derived from)

Propolis (used in Anti-allergens)

Other herbs and raw ingredients (such as St. Johns Wort and Soy isoflavon)

8.2. Recommendations

Explore the Japanese Functional food markets which fit your product expertise. If a U.S. firm has a product that has potential to succeed in the Japanese market, they should be

financially and strategically prepared to compete in the competitive market. Further

investigation should be undertaken, especially in regards to stricter food label regulations.

Disregard FOSHU approval unless the company has: 1. A product that already closely fits into one of the functional categories.

2. Have the information necessary to back up its health claims.

3. Strong representation in Japan.

4. Patience.

Focus on products which can be categorized as Non-FOSHU foods. This category makes up the largest market share in Japan’s Functional Food sectors. Bearing in

mind that FOSHU approval is voluntary, and firms can still market their products as general

health foods; the Non-FOSHU market is much more cost effective and less risky to enter. It is

also a good testing ground for new products, which may lead to future FOSHU certification if

the company so desires.

Target Japan’s Baby Boomer generation and life style related diseases. The senior population is an important demographic in the market. Products that help prevent

life-style related diseases are a growing market due to consumer concerns about metabolic

syndrome and other health conditions.

Investigate high value ingredient prospects which fit your capabilities. Good current examples include: lactic acid, lactose, vitamin C, aloe, corn, devils claw (an herbal

remedy), and vitamin powders. These ingredients are used in many successful functional food

products.

Investigate finished food and drink products which fit your capabilities. Entering the Japanese market for finished products requires more commitment than ingredients

do, both strategically and financially. This report concludes, however, that there are areas in the

market where U.S. companies might have a competitive advantage. Particular areas include

functional beverages (tea and energy drinks), dairy products (yogurt, chewing gum, health bars),

and supplements (vitamins and skin care products).

Appendix A: Food for Specific Health Uses (FOSHU)

Categories of FOSHU Standards

FOSHU

Requires detailed review process with scientific evidence for each

application.

Standardized FOSHU

No requirement of detailed review process for food products meeting

the established standards and specifications.

Must be accompanied by sufficient accumulation of scientific

evidence.

For efficiency: short cut process for products whose safety of use

already approved.

Reduction of disease risk FOSHU


application.

Permitted for products whose ingredients clinically and nutritionally

established to reduce a risk of certain disease (i.e., Calcium for

Osteoporosis and Folic acid for neural tube defects).

Qualified FOSHU


application.

Permitted for products with ingredients showing certain health effects

but not reaching the established standards for FOSHU approval.

Labeled as “Qualified Food for Specified Health Uses.”

Source: Regulatory Systems of Health Claims in Japan; http://www.caa.go.jp/en/pdf/syokuhin338.pdf

Required Conditions for FOSHU Approval

1. Improvement of dietary habits and contribution to health maintenance and enhancement can be

expected by consuming the product.

2. Scientific evidence for the claimed health benefit is available.

3. Clinical and nutritional intake level of the product and/or its functional component is established.

4. The product and/or its functional component is safe for human consumption.

5. Following items regarding functional component are defined: a）Physical, chemical, and

biological characterization and its methods, b) Methods of qualitative and quantitative analytical

determination

6. Nutrient constituent of same type of the food is not significantly changed

7. The food is intended to be consumed on a daily basis and not on rare occasions

8. The product or its functional component is not included in the medical drug list

Notification Shokuanhatsu 0201002, 2007 February 1

Source: Regulatory Systems of Health Claims in Japan; http://www.caa.go.jp/en/pdf/syokuhin338.pdf

http://www.caa.go.jp/en/pdf/syokuhin338.pdf

http://www.caa.go.jp/en/pdf/syokuhin338.pdf

Appendix B: Food With Nutrient Function Claims (FNFC) and Food for Special Dietary Uses

(FOSDU)

Food with Nutrient Function Claims (FNFC) FNFC refers to all food that is labeled with the nutrient function claims specified by the CAA. The

standards and specifications for indication of nutritional function have been so far established for 17

ingredients (12 vitamins and 5 minerals).

These foods may be freely manufactured and distributed without any permission from or notification to

the national government, provided that it meets the established standards and specifications.

Standards and Specifications

- Amount of nutritional ingredient in the recommended daily intake of the product must be

within the specified range.

- Not only the nutrient function claims but also the warning indications must be displayed.

Nutritional

Ingredient

Specified

Range of

nutritional

ingredient of

the advisable

daily intake

Function Claims Warning Indication

Niacin 3.3 ~ 60 mg helps to maintain skin and

mucosa healthy.

Increased intake of this product

will not result in curing diseases

nor promoting health. Please

comply with the advisable daily

intake.

Pantothenic

acid

1.65 ~ 30 mg helps to maintain skin and

mucosa healthy.

Biotin 14 ~ 500 μg helps to maintain skin and

mucosa healthy.

Vitamin A 135 ~ 600 μg helps to maintain vision in

the dark, and helps to

maintain skin and mucosa

healthy.





intake. Women within the third

months of pregnancy or women

considering to be pregnant should

be careful of over consumption.

Vitamin B1 0.30 ~ 25 mg helps to produce the energy Increased intake of this product

from carbohydrate and to

maintain skin and mucosa

healthy.




intake. Vitamin B2 0.33 ~ 12 mg helps to maintain skin and

mucosa healthy.

Vitamin B6 0.3 ~ 25 mg helps to produce the energy

from protein and to maintain

skin and mucosa healthy.

Vitamin

B12

0.60 ~ 60 μg aids in the red blood cell

formation.

Vitamin C 24 ~ 1000 mg helps to maintain skin and

mucosa healthy and has anti-

oxidizing effect.

Vitamin D 1.5 ~ 5.0 μg promotes to absorb calcium

in gut intestine and aids in

the growth of bone.

Vitamin E 2.4 ~ 150 mg helps to protect fat in the

body from being oxidized

and to maintain the cell

health.

Folic acid 60 ~ 200 μg aids in the red blood cell

formation, and contributes

the normal growth of the

fetus.





intake. This product helps normal

development of fetus, but

increased intake of this product

will not result in better

development of fetus.

Zinc 2.1 ~ 25 mg necessary nutrient to

maintain normal taste and

helps to maintain healthy

skin and mucous

membranes. It is involved

in the metabolism of protein

and nucleic acids and is

helpful in maintaining

health.



nor promoting health. Too much

intake of zinc might inhibit

absorption of copper. Please


intake. Infants and young children

should avoid use of this product.

Calcium 210 ~ 600 mg necessary in the

development of bone and

teeth.





intake. Iron 2.25 ~ 10 mg necessary in the red blood

cell formation.

Copper 0.18 ~ 6 mg helps to form red blood cells

and helps proper function of



many body enzymes and

bone formation.



intake. Infants and young children

should avoid use of this product.

Magnesium 75 ~ 300 mg necessary in the

development of bone and

teeth, maintain proper blood

circulation, and helps proper

function of many body

enzymes and energy

generation.



nor promoting health. Increased

intake might cause diarrhea.

Please comply with the advisable

daily intake. Infants and young

children should avoid use of this

product.

Source: Ministry of Health, Labour and Welfare;

http://www.mhlw.go.jp/english/topics/foodsafety/fhc/01.html

Food for Special Dietary Uses (FOSDU) Requirements

Food for Special Dietary Uses (FOSDU)

FOSDU refers to food that is approved/permitted to display that the food is appropriate for special

dietary uses.

Seal for FOSDU Approval

Categories of FOSDU: There are five categories of FOSDU.

(1) Medical foods for the ill

<Single Food>

- low-sodium foods

- low-calorie foods

- low-protein foods

- no/low-protein and high-calorie

foods

- high-protein foods

- allergen-removed foods

- lactose-free foods

<Packed Meals>: meals prepared for one

serving, consisting of several foods

- sodium-reduced

meals

- meals for diabetes

- meals for liver

disease

- meals for adult

obesity

(2) Formulas for pregnant or lactating women


(3) Infant Formulas

(4) Foods for the elderly with difficulty in masticating or swallowing

- Foods for people with difficulty in masticating

- Foods for people with difficulty in both masticating and swallowing

(5) Foods for Specified Health Uses (FOSHU)

Assessment When a food is intended to display special dietary uses mentioned above, permission or approval is

required from the CAA (under the Health Promotion Law, Article 26).

1. Standard Regulation System:

the compatibility with the standard is assessed.

- Medical foods for the ill (Single food and Packed Meals)

- Formulas for pregnant of lactating women

- Infant Formulas

- Foods for the elderly

2. Individual Approval System:

- Medical foods for the ill

- FOSHU

Requirement in Labeling FOSDU must be labeled with information, given below, as prescribed in the Ministerial Ordinance

under the Health Promotion Law

• Product name

• Use by date or date of minimum durability

• Methods to preserve

• Name and address of manufacturer

• Specified permission/approval mark

• Permitted/Approved phrase for display

• Amount of nutrient (including energy value) in the food

• Name of food stuff and food additives

• Instruction for consumption, preparation, and preservation if necessary

• Name of approved body and its address, in a case manufacturer if different from those who

were approved

Source: Ministry of Health, Labour and Welfare


Appendix C: Top 10 Selling Functional Food Products in Japan

Best Selling Companies in the Health Food Market

Company

Sale million

yen

(2009)

Best Selling

Product Product Type

1

Suntory Holding

Limited 166,510 C.C. Lemon Vitamin drink

2 Meiji Milk 107,840

Probio Yogurt

LG21 Yogurt

3 Otsuka Pharmaceutical 94,150 Oronamin C Energy drink

4 Yakult Honsha 92,980 Yakult 65 Lactic acid drink

5 Miki Corporation 60,100 Miki Echo37

Tablet

Supplement

6 LOTTE 52,220 Xitle Series Gum

7 Morigana Milk 50,560 Morinaga Cardas Milk

8 Meiji Seika 38,410 Weider in Jelly Energy jelly drink

9 DHC 36,640 Protein Diet Powdered drink

10 Japan Amway 35,310 Triple X Tablet Supplemet

Source: Fuji Keizai

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